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tv   Power Lunch  CNBC  March 31, 2014 1:00pm-2:01pm EDT

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>> i like rkus, wireless. been kind of beat up. if we keep showing the leader board, my hair is much darker than the reality of 2014. >> have a good day, the final trading day of this quarter. dow is up. "power lunch" picks it up right now. "halftime" is over. "power lunch" and the second half of the trading day start right now. >> scott, thank you very much. i can't remember whether march came in like a lion or like a lamb but it's going out like a lion, at least as measured by the dow. that's the big "power lunch" board. the dow up 141 points. the nasdaq up by 53, nearly 1.3%. s&p higher by 16 points. big money monday this hour as fed chair janet yellen's comments move the markets on this final day of the first quarter. 2014. we will look ahead at the second quarter. and michael lewis probably the most influential writer on business of our time and i think for my money, the best by far,
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he will be on "power lunch" with us tomorrow for an extended interview after the release of his new book. it is called "flash boys." he says the markets are rigged, mostly because of high frequency trading. are these markets free and fair for everyone? we will begin a conversation about that today, continue it with michael tomorrow. and north and south korea engage in artillery duels. is this the real flash point the market should focus on? after a weekend of quakes and aftershocks in california, we are going to talk to a top seismologist at the u.s. geological survey. could the big one be coming? when? first, though, to sue, who knows a little bit about quakes and shakes. >> oh, yeah. >> from southern cal. >> i have been through a number of big ones. it is not fun. it's going to be a very interesting conversation. she is the top seismologist in the united states. meantime, right now, there's a little rumbling but that's the sound of the bulls. they are in charge today.
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the dow up triple digits. right now, up about 145 points, dominic chu. you are tracking the big winners for us. >> absolutely. the dow is moving within 1% of its all time high, that's 16,588. right now you can see up about 140 points. you can see leading the way higher, you've got microsoft, big software heading up, at least leading the way higher, followed by united technologies, then you have intel on the chip side of things as well as ibm and visa. so it looks like technology, technology services and one large defense contractor really leading the way higher. so again, a nice 140 point gain but it won't be enough at least for right now to get the dow to positive on the year. back to you. >> yeah. they're not done yet. we'll see what the rest of the day holds. thanks. see you again in a second. trading action right down here, bob pisani joins me on the floor of the nyse. >> we are closer to new highs on the s&p than the dow. let's take a look. 1878, that's what we need to close for a new historic high on
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the dow today. only four points away. janet yellen helped earlier on. she was talking about considerable slack in the economy, sounding very dovish. saying keeping rates low be needed for some time, that helped. market leaders today, looked like the beginning of 2014 again. biotech stocks are up, airline stocks. xsd, semiconductor stocks, those were market leaders early on, had trouble in the last few weeks. and speaking of trouble in the last few weeks, it's gone away for emerging markets. the eem is up eight days in a row right now. china, brazil have recovered a little. that's a new high for the year. we were saying this was dead three weeks ago. new high for the year. how about all the momentum and growth names that started out january as the big market leaders here. they are to the downside right now but they have been replaced by consumer stocks. so what's moving here is the growth names that people are paying a lot of money for. in the last couple weeks, they're being replaced by more let's call them value-oriented names, cheaper names. kroeger, pepsi, general mills.
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who would have thought that was going on even two weeks ago. i think it's a healthy sign. >> we needed some rotation. >> maybe we get growth in the economy. these stocks are the ones you want to own right now. they are the cheaper ones. >> see you again in just a couple minutes. ty? new fed chair janet yellen getting wall street's attention again today with a speech described as quote, very dovish. our senior economics reporter steve liesman here with the details and the reaction. market up. that would be one reaction. >> it was probably good for 50 points on the dow. new fed chair janet yellen making strong comments on one of the most controversial and important issues for the fed. how much extra labor, labor market slack, is out there. yellen saying in her opinion, there is lots of it and the fed needs to keep its monetary policies easy and in place for some time. >> i think this extraordinary commitment is still needed and will be for some time, and i believe this view is widely shared by my fellow policy
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makers at the fed. >> yellen offered five reasons why she thinks there's a lot of slack in the labor market. one, seven million people working part-time for economic reasons. they want a full-time job. there are not as many people quitting jobs, not the same churn in the jobs market. wage gains are small. many people have been unemployed for six months or more. and the participation rate remains depressed. yellen went on to say she understands that the recovery still feels like a recession for many americans and in many ways, it's as hard to find a job during the recovery as it was during many recessions. and the almost political tone, she mentioned by name three people and discussed their job situations. this is one of the most dovish fed speeches ever, saying deep dish dovish batman, credit suisse saying monetary policy needs to remain accommodative. the more slack in the jobs market, the more yellen believes policy needs to remain easy to keep interest rates low and aid
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the job market. also, the more slack, the more the fed can keep rates low without worrying about wage induced inflation. >> about two weeks ago in her press conference, she intimated that rates may start to rise six months or so after the accommodation, the bond purchases and later this fall. it created a real abrupt slip in the market. is this in any way an effort on her part to dial or walk that back a bit? >> i think so, indirectly. she doesn't mention the amount of time that it would take or how long, she says some time, but she makes a very dovish case about the market. if you want to know or had any questions how dovish yellen was, read this speech. when it comes to the job market, she thinks the fed has a lot of work to do. >> by emphasizing the slack in the job market she is by inference suggesting that they are going to be accommodating for a long time. >> there is still a direct need for her to respond. but this is a piece of that. >> thanks very much. all righty. we will go to sheila dharmarajan, aren't we?
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>> we will talk about the biotech index having a terrible month. we have been reporting on that fall since the peak. take a look at the chart. it's a pretty gradual down turn. about 11% in a month. that's the ibb, the etf that tracks the biotech index, down more than 12%. you can see the steep fall-off on the right-hand side of that chart. sheila dharmarajan is at the nasdaq, home to almost all the stocks in that index. one sector does not make the nasdaq alone. so you will report on some of the winners and also the losers on this final day of q-1. >> yeah. it's the last trading day of the first quarter and look, the nasdaq has certainly been the scene of the crime. we have seen a lot of volatility this quarter. let's talk about the biotechs because yes, they have been getting battered in the past month, down double digits, but the group is still showing gains for the quarter. the biotech index is up about 3% for the quarter right now. very mixed performance when you look at individual names. gilead, celgene, all posting losses but amgen and others are
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hanging on to gains for the quarter. got to talk about momentum at the nasdaq. there's a lot of talk of this momentum trade being over. what the quarter has really shown is that there's a divergence across the group. tesla still posting 25% plus gains for the quarter. facebook is also up but priceline, this is interesting, this is one of the big momentum winners in 2013, only up about 3% for the quarter. netflix, another one of those in the red. finally, shift gears to large cap tech because this is a lot of what traders are talking about. google, for example, barely positive for the quarter. amazon showing double digit declines for the year but take a look at microsoft, posting a solid double digit gain, hitting a near 14 year high. a lot of talk about that mixed performance. i want to mention geopolitical concerns, what's happening with russia and ukraine still very much in investors' minds. take a look at the biggest loser for the quarter, a russian
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telecom company. when you are thinking about the quarter ahead, a lot of people say expect this volatility but also out for this divergence. it's not like the biotech trade will work or not work, or the momentum trade will work or not work. we are starting to see a stock picker's market emerge for this quarter. very strong day for the dow jones industrial average. we are up about 143 points. the s&p up 16 and the nasdaq up 1.25% on the trading session. cnbc contributors kenny pulcari and michael farr are here. how optimistic are you given the volatility we have seen and are starting to see that rotation kick in as well? >> reasonably, i think optimistic. we have had kind of a flat pull-back quarter where things didn't do a whole lot, but after a 32% rise in 2013, i don't think a flat going sideways
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quarter is bad at all. we have changed fed chairmen, we heard the fed chairman make a very uncharacteristic hawkish remark a couple weeks ago. we heard more i think of the real inner yellen today in her dovish remarks, and you know, i think the inner yellen said what was it, extraordinary support will be needed for some time. stocks like it. i don't think the fed's going anywhere. i think stocks can do okay. i don't think wildly optimistic but okay. >> you like consumer staples, health care and technology, correct? >> i do. there's no need to swing for the fences in here. i think solid balance sheets that are growing top line and bottom line. you have to be able to grow top line along with bottom line in this market. make sure you own some things that's good that i think can appreciate and grow. >> kenny, you kind of disagree that ms. yellen has changed her tune. >> i don't see how two weeks ago she could have come out and been so in fact, hawkish as she was,
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i think she was very legitimate. she said listen, it's a slow recovery but the fed is going to continue down the path. she could not have been any clearer, right? she even indicated rates six months at the end and everyone started speculating. i think actually the market needed to hear that. she said what it needed to hear. today, listen, the market was up ten points before she even opened her mouth at 8:30 so you can't necessarily say this whole thing is because she came out with a dovish speech. certainly the next five or six points might be attributed to that. i think people are reading way too much into that. i do not think she will turn around and be weak spined versus what she said two weeks ago. >> gentlemen, thank you very much. >> sue, i think kenny's right, just really quickly. i think it's true that janet yellen said what she meant, but i think she still softened it. i think she gave the fed report at the last meeting and i think she's telling you how she feels right now. you have to listen to the fed chairman. >> on that note, michael, you get the final word. thanks so much. kenny, see you again in just a second. ty? >> always good advice.
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listen to the fed chairman. he may be the business novelist of our time, michael lewis has a new book out taking on the high frequency trading world called "flat boys." he will be here live with us tomorrow on "power lunch" at 1:00 eastern. do not miss it. he is also bringing the man many say is the star of the book, iex's founder, who has developed an exchange he believes will really, really, not kidding, level the playing field. that is tomorrow at 1:00 eastern time only right here on "power lunch." eamon javers has gone through the book. there is really like one copy out there. he is with us live in washington. what did you find? >> reporter: well, here's the copy right here. this is the book that all of wall street is digesting today to try to figure out what the implications of it are going to be. last night, michael lewis sat down with "60 minutes" to explain why he says the u.s. stock market is rigged. take a listen. >> it all happens in tiny
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periods of time. there is speed advantage that the faster traders have, it's milliseconds, sometimes fractions of milliseconds, but it's enough for them to identify what you're going to do and do it before you do it at your expense. >> so it drives the price up. >> it drives the price up and in turn, you pay a higher price. >> the high frequency trading community is responding to this this morning. peter nabit of the modern markets initiative sent us this statement. take a look. he says market quality and integrity are of the utmost importance and we welcome the opportunity to continue improving the market for end investors. unfortunately, the "60 minutes" story only presented one view of a very important issue and promoted sweeping inaccurate generalizations about high frequency trading. also, i should tell you that i called the s.e.c. to ask about the allegations that the u.s. stock market is rigged. it's the s.e.c.'s job to make
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sure the stock market is not rigged. a spokesperson there declined to comment on the lewis book but pointed out that the s.e.c. is conducting what he called a comprehensive data-driven analysis of all this. sue and tyler? >> thanks very much, eamon. stick around. we will bring in sue, bob and kenny into the conversation. bob, what is your initial reaction to the charge that the market is fundamentally rigged against the little guy and that their costs to buy and sell stocks are higher than they would otherwise be because some folks with big fast computers beat them to the punch? >> we have been talking about high frequency traders for five years and the fact that some people have access to fiber optic lines and how fair or unfair is that. the fact is that calling the market rigged is i think a gross overstatement of what is going on. there are high frequency traders who want to sell people and scalp a penny from people out there. if you want to buy apple at $530, they are trying to sell it at $530.01.
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i would rather that not happen but to say that the market is rigged as a result of that is a gross overgeneralization. >> you know, i talked to a very prominent hedge fund manager this morning and asked him his take, and he is livid about the high frequency trading phenomenon that's going on. he basically said to me it increases my trading costs by up to half a percent on each trade as i execute it, in and out approaching 1%. he has billions of dollars under management. you may say it doesn't impact the little guy but here's the problem. if you are in a 401(k) or in a pension or part of an endowment, those costs are not absorbed by the trader. they will be passed on to the investor. >> that's exactly the confusion. because you have to define the individual investor. he's right, if you are just some guy going to buy 50 shares of coke and put it in your kids' college fund, absolutely not impacted but if you are an individual participating in a
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401(k) or mutual fund or i.r.a., it's that institutional flow that gets impacted from high frequency trading which ultimately flows right down to the individual participants in that fund. so individually -- >> it makes it more costly. >> much more costly. >> when was this golden moment 30 or 40 years ago when everybody got the perfect spreads? i'm not trying to be an apologist for them but we know spreads were wider 30 or 40 years ago. we know it's cheaper to trade now than it's ever been for anybody out there. we know the spreads are tighter. we know the execution is almost instantaneous. >> he's telling me it's not cheaper for him to trade and it takes a lot more time for him to trade. >> for the individual investor it might be cheaper. you can go to fidelity for $7.99, you can do all you want. for the institutional investor it's not cheap. >> eamon? >> one of the questions here is the irony in all this which lewis points out in the book is that computerized electronic trading was really created to eliminate the middleman in the first place, the guys on wall street who had access to all the information that the rest of us didn't have. so the irony here is that it created an unintended
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consequence where there's another gap now that can be exploited. the question is as you propose solutions to this, how are you going to do it in a way that doesn't create some third unintended consequence that we can't see just now from where we sit. because the technology is moving so fast it's very difficult for regulators to get a grip on this and they clearly are struggling to figure out what they ought to be doing and how they ought to be constraining this or if they should at all. >> the s.e.c. in the 1990s, eamon is right, they felt the nyse and nasdaq were moving too slowly, were not innovative enough, and they were encouraging this kind of computerized trade. >> right. now there's a massive conflict of interest because you have every investment bank has got their own venue, their own center, it's fragmented. they have no incentive to go to a public marketplace. they have every incentive to fragment it and keep it inside which then weakens the overall public -- >> and what this -- >> off-market trades. >> that's right. last time i checked, dark
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doesn't mean transparent. >> too many places to trade creates too much confusion. >> all right, guys. >> the other thing, what this hedge fund manager is telling me is because his costs are increasing incrementally, it forces him not to move in equities. he's looking for alternative investments like etfs or something that cost him less. there you go. to be continued, right, ty? >> to be continued tomorrow, in part because michael lewis will be here with us live on "power lunch" at 1:00. he has been a friend of the program for a long time. for my money, the best business writer out there, bar none. plus, iex's founder, the man lewis thinks will solve many of the problems he lays out in his new book. they will be together talking about leveling the playing field of modern trading. we will hear from the other side as well. in the fight against cholesterol, statins took the market by storm. a new class of cholesterol fighters is taking the stage. dominic chu is on the case. >> several big name stocks are
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in this group. i will have those names and show you how they are moving and talk about the benefits in this war against cholesterol. >> i will be listening. bet you can't guess why. also, the final day to sign up for obamacare. is it a win for the president's legacy? a victory for american health care? bertha coombs and dan mangun are standing by with more in two minutes. ameriprise asked people a simple question: can you keep your lifestyle in retirement? i don't want to think about the alternative. i don't even know how to answer that. i mean, no one knows how long their money is going to last. i try not to worry, but you worry. what happens when your paychecks stop? because everyone has retirement questions.
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welcome back to "power lunch." so the war against high cholesterol has been really about statins for decades now. you know them by brand names, crestor, zocor, lipitor. the best-selling pharmaceutical of all time, of course, is pfizer's lipitor. but news is now out about a special kind of new drug to combat high cholesterol. they are bioengineered proteins that keep your liver from absorbing cholesterol and companies like amgen, sanafi, regeneron, and pfizer are working on these kind of drugs. here's a catch. statins are typically pills taken orally, they are cheaper because generic versions are available and these new versions are meant to be taken as injections periodically. they could cost a heck of a lot more as well. there is also more testing that needs to be done but investors seem to be optimistic at least for now. check out shares of amgen. they are outperforming the market today. could be one of the reasons why
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this news on perhaps a new beneficial form of combatting high cholesterol. tyler? >> dominic chu, thank you very much. open enrollment for obamacare comes to an end. yes, we really mean it, an end today. did the people who were supposed to do it, do it and is this going to be a big win or a big loss for the obama legacy? dan mangun of cnbc.com is here. we will get to you in just a minute. meanwhile, bertha coombs and that last minute rush to sign up. it has been quite a number of people. >> it really has been. what a difference six months makes. we are seeing glitches. the administration says they are seeing a record number of people trying to access the site as of right now because of a glitch, they are not accepting new applications due to technical problems. so this is probably why they gave themselves some wiggle room saying if you get in line today you will have a few more days to complete the application. two million people were on the site over the weekend. nothing like six months ago but still, the hiccups this morning.
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they had to keep the site down beyond the usual maintenance time until 8:00 a.m. to clear up that software bug but it appears to continue to be a problem here. people are having trouble, they cannot create new accounts. but getting on today puts them in line. after reaching the milestone of six million people signing up for plans last week, the administration is set to surpass its revised targets. still a big question, how many of these procrastinating folks are young and healthy. it's a demographic that's been lagging. and for insurors, the question is how quickly can they size up whether they priced these plans correctly. >> the whole numbers game for them is determining what do these new members look like, how much are they going to cost us in terms of medical care and how do we factor that into our pricing for next year. >> insurors literally have no time to turn that data around, because they have to come up with pricing for next year over
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the next couple months. >> there are so many questions here. but let me start with this one. does the fact that you've got six or seven million new customers to these web sites -- to these insurance plans, does this make the repeal of this law much more difficult than it was a few months ago? >> yeah. i think it makes it extremely difficult. it's political dynamite. the republicans can run on a critique of obamacare they framed in the midterm elections but i think for actually unwinding this repeal, it's taken away real tangible benefits for people. >> mr. obama himself found out how difficult it was when he made the promise if you have health care insurance, you are not going to lose it. that was a smaller number than six months, as i recall. now if you do that after these people have signed up, presumably they will be happy, some of them won't be, obviously. nobody is ever really happy with their insurance. in any event, they have coverage now and some of them didn't before. take that away, you have political dynamite. >> indeed. >> thanks very much. we'll be watching it.
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sue? north and south korea showing the world the war between them is not over. an intense exchange of artillery fire in the midst of drills involving the u.s. that's coming up next. and a magnitude 5.0 earthquake rattling los angeles over the weekend. lots of aftershocks as well. is it signaling a big one ahead? we will ask a top u.s. seismologist about that. and lots of damage, but will home insurance cover that? jane wells is in fullerton, california. hi, jane. >> reporter: hey, sue, yeah, this is one of the hardest hit areas. you see that uhaul truck back there? he's moving in today. calls himself an optimist. he doesn't have earthquake insurance and he's not alone. d afghanistan, in 2009. orbiting the moon in 1971. [ male announcer ] once it's earned, usaa auto insurance is often handed down from generation to generation. because it offers a superior level of protection.
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[ male announcer ] in a clinical study, over 80% of treated men had their t levels restored to normal. talk to your doctor about all your symptoms. get the blood tests. change your number. turn it up. androgel 1.62%. welcome back to "power lunch." check out the s&p 500, within half a percent of its record high, 1884. that's the level it's currently trading. you can see there, just about 1873. leading the index higher, micron followed by edward life sciences, cigna, vertex pharmaceuticals and alcoa. those shares helping to try to push to that new record high. >> thank you again for the dayton flyers last week. they gave a good fight in the tournament. thank you. in the midst of joint military exercises involving the u.s. and south korea, the north took things a step further. north korea firing more than 100
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artillery rounds into south korean waters as part of a drill. that led to south korea firing back. the south koreans near the border were forced into bomb shelters as a result of this. nobody was hurt but you can see there was a lot of smoke and action. sue? >> tensions are rising in that part of the world. the markets paying attention to that, too. also, look at this. two back-to-back earthquakes hitting southern california. los angeles shaken by nearly 175 smaller aftershocks. there has been damage but will earthquake insurance actually cover it? our jane wells is in fullerton, california, just about five miles from the epicenter. jane, over to you. >> reporter: sue, they are still cleaning up three days later here on this street which was pretty hard hit in the quake. if this street is an accurate reflection of the state, only one in ten homeowners here has earthquake insurance. good luck trying to get it today. there is usually a freeze on new policies after a quake of some
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note, according to a broker who told us he's been getting a lot of calls. but earthquake damage is not covered in regular insurance policies and quake insurance is expensive, with deductibles usually pegged at 10% to 15% of the value of the structure before any insurance kicks in. like if you had a $1 million home you would have to pay $150,000 out of pocket before you would get any insurance money. you need to have significant damage for it to be worth it. >> this is the worst ever. this was truly bad. >> reporter: george has lived if his home for 45 years, through several quakes but he was right on top of this one. do you have earthquake insurance? >> no. why would i? no. honestly, basically because number one, the premiums are quite high and then when you take a look at the deductibles, i mean, they are huge. >> reporter: according to the
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insurance information network of california, only 11% of residents in this quake-prone state have earthquake insurance. breaking that down by residence, it's 12% of homeowners, 17% of condos, 20% of mobile homes and only 5% of renters, meaning that those tenants will have zero coverage if they have any personal property damaged in a quake. back to you. >> jane, thank you so much. here with us from los angeles to discuss the recent southern california quakes, u.s. geological survey seismologist dr. lucy jones. she also serves as the science advisor to los angeles mayor eric garcetti. nice to have you with us. thanks for joining us. you know, it seems as though, i grew up in los angeles so i went through several of the major quakes, and i talked to my mom-in-law this weekend. she was nervous about it but i see from my notes that you are saying we have really actually had a very quiet period of time for los angeles and maybe we are just getting back to normal. >> that's right.
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if you remember back into the late '80s, early '90s, we had a damaging earthquake almost every year in los angeles. now since the northridge aftershocks died off, almost 20 years ago, we have only had -- this is only the second magnitude 5.0 in that whole time period. so people have become complacent, dropped earthquake insurance because we haven't been having them. yet it's not the long-term pattern. we haven't stopped plate tectonics. we will have more. >> i know obviously you can't predict the next one or predict the future. does the fact we are having more frequent quakes and they seem to be lasting maybe a little bit longer, does that tell you anything about what we can expect in the future? >> well, the lasting a little longer means they're a little bigger. the duration of the earthquake is totally controlled by the magnitude. it doesn't give us direct pattern, but when you're having earthquakes, you tend to have earthquakes. so when we see more of them like this, it means that our overall
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chance is up somewhat and not a definitive prediction, but we shouldn't be thinking we can just stay the way we've been for the last couple decades. >> get the earthquake emergency kits ready. you're working with the mayor to prepare los angeles but one of the issues with los angeles, like many major cities, is you have a lot of older homes made of concrete, made of lumber, they haven't been brought up to codes. how are you going to tackle that? how is los angeles going to prepare? >> well, the big issue is, as you say, those older buildings, building codes are not retroactive so they just aren't as safe as the new ones. we need to find a way to incentivize making those changes, because you can retrofit your building and make it safer. whenever i've bought a home, i have done that a few times in the l.a. area, first thing we do is hire a foundation specialist to tell us what we can do to make it stronger. we have got to find a way to incentivize that.
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with this very low insurance coverage, people don't have that mechanism to get you to do the fire alarms and the other things that reduce your fire insurance. so i think it will require us coming together as a community because the benefit of retrofitting is not just on the owner. we are really concerned about the long-term economic viability of los angeles. if too many people have no home or don't have an office they can go to work and maybe don't have water in their homes, they will be leaving and we could be ending up like we have seen in other communities where the economy just really goes down for decades. so what we're trying to do is prevent that. >> good luck with that. that's my hometown. i hope you are extremely successful. thank you, dr. jones. >> thank you. >> appreciate it. the metals market's closing right now. the natives are restless down here today. i don't know what they're doing. baseball started. that's what's going on. it's opening day. all right. stocks are rallying but the gold
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market is down $10.50. silver is down as well. copper is on the minus side. palladium is up a third of a percent. let's go to sheila uptown at the nasdaq and find out what's happening there. you are the biggest percentage mover in terms of the markets today. >> yeah. we are having a monday market rally at the nasdaq, outperforming the overall general markets. nasdaq composite up over 1%. here's the thing. if we can keep track for these gains, we will actually erase the loss at the nasdaq for the quarter and end up with a gain. certainly good momentum here today. biotech is part of that story. biogen getting a big kick after its drug was approved by the fda. amgen getting a positive spike after good results on its cholesterol drug. wynn los angeles, mgm positive today. >> sheila, thank you very much. let's check on the bond market on the back of fed chair yellen's comments. rick santelli is tracking the yield curve at the cme. ricky?
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>> well, the parent gave a speech and the children were disciplined. we see yields down, stocks up. look at the ten-year, unchanged. 30's unchanged. it's the two year, three year, five year where all the action's at. you see the fives to tens spread. yes, when the five year actually sold off more than the rest of the curve, down in yields, up in price, what we saw was actually a steepening. if you look at a year to date of fives hovering still close to the highest yields of the year and the dollar-yen did exactly what it was supposed to, it popped in dollar favor which is the correlation we see with the yield curve steepening, especially from the midsection. tyler, back to you. >> rick, thank you very much. the beverage industry firing back over new fears about the health effects of diet soda. sara eisen has the details. >> i have breaking news on this front, tyler, relating to the carbonated drinks industry. just out, a noted analyst for the industry at beverage digest just put out new data and new numbers.
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very disturbing from the industry. it shows that volumes in soft drinks continue to go down very sharply and in fact, in the united states, according to this new report, carbonated soft drink volumes are at levels last seen in 1995. it's going to be a challenge for coca cola who is the industry leader, for pepsico and dr. pepper. this comes hot on the heels of another negative headline, negative health study for diet coke, pepsi and other soft drinks. in fact, this one came from the university of iowa. it shows that for post-menopausal women who drink two or more diet sodas a day, 30% are more likely to have a cardiovascular event or heart attack. 50% are more likely to die from heart disease. now, of course, the industry association points out that there's no causation found here, just association. still, you get these negative headlines, you get shifts in consumers' tastes which we have
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seen, and there has been a migration away from diet colas. that is part of this new report. diet cola, diet drinks are passe. they are the stocks, coke, pepsi and dr. pepper snapple, not a whole lot of movement. this is the ninth straight year we have been seeing carbonated soft drinks declining. just more bad news for the industry. as it looks towards innovation, new sweeteners and other methods including pricing to try to fight it. >> very important point that this does not prove causation, that study. it suggests an association. so the individuals who are drinking those two plus diet sodas every day may have other underlying health care issues that contribute to the heart incidents they have, right? >> absolutely. it's an important point, as you look through some of these studies. but the trend is clear. the numbers are backing it up. that is, people are increasingly wary of the health benefits of
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diet. in fact, they are shifting instead to more traditional colas, energy drinks or sparkling water, showing tremendous growth, and away from the diet colas. that is something you heard ceos talk a lot about, the consumer shift there. >> i love my cola drinks but i'm drinking a lot more water these days. thanks very much. the young still having a tough time finding a job in this economy. the real reason why millenials have tough times landing jobs. shocking new details also about gm's ignition problems as mary barra gets ready to be grilled on the hill. we'll be right back. with all the opinions about stocks out there, how do you know which ones to follow? the equity summary score consolidates the ratings of up to 10 independent research providers into a single score that's weighted
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heroes...bad guys... asteroids. available only on mars. there's watching. then there's watchathoning. ♪ welcome back to "power lunch." the best performing sector among the best performing sectors in the s&p, utility stocks getting a boost from fed chairman janet yellen, who said the central bank's commitment to bolstering the economy would be needed for some time. that means lower interest rates and that means dividend stocks like utilities still remain attractive to some investors. those utility stocks certainly ones to watch amid that yellen comment. back to you, sue.
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>> nice percentage gains there. thank you. general motors' ignition switch problems front and center this week on capitol hill. a congressional report says the company had a fix for the issue in 2006. but they didn't implement it. 13 deaths have been linked to a faulty ignition switch in those cars. gm's ceo mary barra testifying tomorrow before the house energy and commerce committee's oversight and investigations subcommittee. on wednesday, the department of transportation's inspector general will be grilled by a senate subcommittee. gm shares down about 5% over the past month. today, they are down another quarter of a percent on the trading session. ty? it is job hunting season on many college campuses across the country. the young still struggling to find work. the real reason why millenials have a tough time landing jobs. you can't afford to miss this one. we'll be right back. we asked people a question,
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how much money do you think you'll need when you retire? then we gave each person a ribbon to show how many years that amount might last. i was trying to, like, pull it a little further. [ woman ] got me to 70 years old. i'm going to have to rethink this thing. it's hard to imagine how much we'll need for a retirement that could last 30 years or more. so maybe we need to approach things differently, if we want to be ready for a longer retirement.
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♪ [ girl ] my mom, she makes underwater fans that are powered by the moon. ♪ she can print amazing things, right from her computer. [ whirring ] [ train whistle blows ] she makes trains that are friends with trees. ♪ my mom works at ge. ♪ it is job hunting season across college campuses but for
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some millenials it's not just the tough job market keeping them unemployed. some employers are complaining about millenials showing up for interviews in casual clothes, using their phones during job interviews, yes, texting, and some even bringing their parents into interviews. cnbc.com's kelley holland wrote about it and dan chavel is founder of millenial branding. welcome to both of you. people bring their parents to job interviews? >> they do. i read a survey that had 8% of respondents saying their parents came with them in job interviews. 3% had the parents actively participating in the interview. >> mom wasn't just sitting in the wings, she or dad was asking questions. >> right. i spoke to a director of recruiting at a major company who said he has had moms call him to arrange interviews. >> what is it with millenials. are you one? >> i am one. >> you have the nice suit, the thin tie. >> it is cnbc. >> let me fix your collar. go ahead. what is it with these guys? >> they rely a lot on their parents for advice.
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they choose their parents over teachers, over guidance counselors. in fact, we just did a study with intermesh.com that shows they are avoiding career centers. half of them aren't even going to them. they are turning instead to online resources. they need to start preparing themselves better. >> they have the phenomenon of the helicopter parent, i guess. are millenials more inclined as a group to think they are better qualified than they actually are? >> i think they do sometimes feel extremely impressed with their own qualifications. i did speak to recruiters who said sometimes millenials, if they get to an interview and act like hey, i'm here, i came, and they don't necessarily have good questions to ask, they haven't thought through how all the wonderful skills they have been acquiring, because they are superbly educated, how those things would actually help an organization. they feel they showed up, therefore, they should get the trophy. >> is that one of the
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manifestations of a millenial? >> when we talk to h.r. professionals, that's one thing they complain about. they are unprepared for the interviews. they are not doing the research. there is an expectation because you can go on linkedin and see the profile of the person you will be speaking to the next day. >> they are not doing their research. i suppose some of this was probably true. i remember as a baby boomer coming into the work force in 1976 thinking hey, i am well educated, i am here ready to take the world by storm, and the world goes so what? >> we all thought we were rock stars. right? but there are certain things you can do to show respect for an organization that will go a long way toward getting a job. >> thanks very much. appreciate you being with us. you can read kelley's full article on cnbc.com. dan, thank you very much as well. sue? one thing they should never do is text during the interview. make eye contact. it's a concept. coming up on "power lunch," a global catastrophe. details of a very scary new
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report on climate change. plus, new fears about the health effects of diet soda. and what it means for the big players coke and pepsi and the industry as a whole. then the stock market mirage.
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we know we're not the center of your life, but we'll do our best to help you connect to what is.
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a quick power rundown. first topic, u.n. sounds the alarm on global warming, saying if left unchecked the entire planet might be vanquished at some indefinite point in the future, maybe. we hear this rhetoric again and again. what is different this time, if anything? >> this report was so dramatic, it almost read like a script for the next will smith movie or sequel to "water world." death, famine, war, natural disasters. it really is scary. if it's true, we need to do something. if not, at least it will make for a good movie. >> i think we are starting to see the tipping point from the investment perspective as well. things like water resources, things like energy conservation, those are becoming really big investing themes. a report like this, if you are into those type of companies and stocks could actually be positive. it shows that people are really caring about this issue even if they are being a little dramatic about it. >> let's move on to number two. ladies, before you sip, a new
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study finds that excess consumption of diet drinks is linked to heart problems in older post-menopausal women. what is next here? sheila, i listened to the earlier report from sara eisen and thought well, there's an association here but not a causation. >> exactly. >> these folks may have other underlying health problems that cause their risk to be elevated. >> exactly. that's why you have to be really careful with headlines like this. causation is not correlation and vice versa. in fact, the report even says that if you took a look at the people who took part of the study and the results were based on entire lifestyle choices. things like bmi, overall diet, what they were doing, how much they were exercising, yes, diet soda may play one part of it but it wasn't a causation and i think that's so important when you are reading these type of stories. the reality is these people probably didn't have the healthiest lifestyles to begin with. >> robert? >> yeah, there is a broader shift here under way where carbonated beverages are giving way to water. you drink a lot more water
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yourself. remember in the mid 1990s, the ceo of coke told me we will not stop growing until the faucet in your kitchen is used for what god intended which is coca cola, and we are now seeing that whole story line break apart. it's all about water and regardless of this study, diet soft drinks are going to decline. >> michael lewis' new book "flash boy" the talk of wall street today. lewis says the market has been completely dehumanized, existing only inside of black boxes and heavily guarded buildings he says in new jersey and chicago. on balance, robert, is this a bad thing or good thing? >> it's interesting to see the media react to him today, saying look, we all knew this. the debate's been under way for awhile and this is nothing new. what michael lewis is so good at doing, when his book on baseball, "money ball" came out, the baseball world was saying we all knew this but he brings it to a bigger audience. he changes the way america looks at things. this will change the game for high frequency trading. >> sheila? >> this may change the game but
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you have to be really careful with headlines like this. bob pisani makes this point all the time. if you are a mom and pop investor or retail investor, it has never been cheaper or easier or technologically more efficient to get into the market. that's an important point that cannot be forgotten amongst all the high-flying words around this theme. >> should we be surprised that some guys, i'm using that as a generic word, some guys get a better deal than others? >> look, i think again, it's sort of been out there for those of us in the financial media. i think the mom and pop investor listening to "60 minutes" last night learned a lot about what is basically legal skimming. it's a very small amount from everyone's portfolio, but what is legal skimming i think to mom and pop of america, they are going to be surprised. they did learn something they didn't know before. >> thank you both very much. michael lewis will be with us right here on "power lunch" tomorrow. sue? thanks, guys. appreciate it. indeed, michael lewis will be with us and we look forward to that very much. all right. we have a market that's up about 130 points.
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we'll see what the afternoon brings. that does it for us on "power lunch." >> see you when you get back home. let's see what's coming up meantime on "street signs." thanks for joining us. >> you know, when boring can be lucrative. bonds have been a surprise outperformer this quarter. whether or not that continues. also, a government regulations killing craft beer makers? we will speak to the president of brooklyn brewery. and $75 oil? dream on, says our guest. all that and lots more. "street signs" is the name of the game. it's starting right after this break. peace of mind is important when you're running a successful business. so we provide it services you can rely on. with centurylink as your trusted it partner, you'll experience reliable uptime for the network and services you depend on. multi-layered security solutions keep your information safe, and secure. and responsive dedicated support meets your needs, and eases your mind. centurylink. your link to what's next.
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emerson. ♪ janet yellen speaks and stocks take off. so what's all this talk about the stock market being rigged, mandy? hello, folks. that hot debate and maybe why you should not care. could sub-$3 gas really be on the way? and the most boring but maybe the most profitable headline that you will hear all week. it's the best day for stocks in exactly two weeks but the big story today is the best-selling author michael lewis saying on "60 minutes" last night that the stock market is rigged by a gang

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